The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and VCSH is a Vanguard Short-Term Bond fund. So, what’s the difference between BNDX and VCSH? And which fund is better?
The expense ratio of BNDX is 0.03 percentage points higher than VCSH’s (0.08% vs. 0.05%). BNDX is mostly comprised of A bonds and VCSH has a high exposure to BBB bond. Overall, BNDX has provided higher returns than VCSH over the past ten years.
In this article, we’ll compare BNDX vs. VCSH. We’ll look at annual returns and industry exposure, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss BNDX’s and VCSH’s performance, holdings, and fund composition and examine how these affect their overall returns.
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Summary
| BNDX | VCSH | |
| Name | Vanguard Total International Bond Index Fund ETF Shares | Vanguard Short-Term Corporate Bond Index Fund ETF Shares |
| Category | N/A | Short-Term Bond |
| Issuer | Vanguard | Vanguard |
| AUM | 116.41B | 47.88B |
| Avg. Return | 4.63% | 3.12% |
| Div. Yield | 0.94% | 1.89% |
| Expense Ratio | 0.08% | 0.05% |
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) is a N/A fund that is issued by Vanguard. It currently has 116.41B total assets under management and has yielded an average annual return of 4.63% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.08%.
The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) is a Short-Term Bond fund that is issued by Vanguard. It currently has 47.88B total assets under management and has yielded an average annual return of 3.12% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.05%.
BNDX’s dividend yield is 0.95% lower than that of VCSH (0.94% vs. 1.89%). Also, BNDX yielded on average 1.51% more per year over the past decade (4.63% vs. 3.12%). The expense ratio of BNDX is 0.03 percentage points higher than VCSH’s (0.08% vs. 0.05%).
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Fund Composition
Holdings
| BNDX Bond Sectors | Weight |
| A | 29.19% |
| AA | 26.79% |
| AAA | 21.59% |
| BBB | 19.41% |
| Others | 1.57% |
| Below B | 1.45% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BNDX’s Top Bond Sectors are ratings of A, AA, AAA, BBB, and Others at 29.19%, 26.79%, 21.59%, 19.41%, and 1.57%. The fund is less weighted towards Below B (1.45%), B (0.0%), and BB (0.0%) rated bonds.
| VCSH Bond Sectors | Weight |
| BBB | 47.49% |
| A | 43.06% |
| AA | 8.45% |
| AAA | 0.95% |
| Below B | 0.03% |
| Others | 0.02% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
VCSH’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 47.49%, 43.06%, 8.45%, 0.95%, and 0.03%. The fund is less weighted towards Others (0.02%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| BNDX | VCSH | |
| Mean Return | 0 | 0.24 |
| R-squared | 0 | 37.53 |
| Std. Deviation | 0 | 2.34 |
| Alpha | 0 | 0.93 |
| Beta | 0 | 0.48 |
| Sharpe Ratio | 0 | 0.97 |
| Treynor Ratio | 0 | 4.75 |
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Beta of 0 with a R-squared of 0 and a Standard Deviation of 0. Its Alpha is 0 while BNDX’s Mean Return is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Sharpe Ratio of 0.
The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) has a Beta of 0.48 with a Alpha of 0.93 and a Sharpe Ratio of 0.97. Its Standard Deviation is 2.34 while VCSH’s Mean Return is 0.24. Furthermore, the fund has a Treynor Ratio of 4.75 and a R-squared of 37.53.
BNDX’s Mean Return is 0.24 points lower than that of VCSH and its R-squared is 37.53 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than VCSH. The Alpha and Beta of BNDX are 0.93 points lower and 0.48 points lower than VCSH’s Alpha and Beta.
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Performance
Annual Returns
| Year | BNDX | VCSH |
| 2020 | 4.6% | 5.08% |
| 2019 | 7.88% | 6.85% |
| 2018 | 2.94% | 0.91% |
| 2017 | 2.4% | 2.45% |
| 2016 | 4.67% | 2.63% |
| 2015 | 1.08% | 1.25% |
| 2014 | 8.83% | 1.96% |
| 2013 | 0.0% | 1.37% |
| 2012 | 0.0% | 5.74% |
| 2011 | 0.0% | 2.94% |
| 2010 | 0.0% | 5.51% |
BNDX had its best year in 2014 with an annual return of 8.83%. BNDX’s worst year over the past decade yielded 0.0% and occurred in 2013. In most years the Vanguard Total International Bond Index Fund ETF Shares provided moderate returns such as in 2015, 2017, and 2018 where annual returns amounted to 1.08%, 2.4%, and 2.94% respectively.
The year 2019 was the strongest year for VCSH, returning 6.85% on an annual basis. The poorest year for VCSH in the last ten years was 2018, with a yield of 0.91%. Most years the Vanguard Short-Term Corporate Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2016, and 2011, when gains were 2.45%, 2.63%, and 2.94% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BNDX | $10,000 | $13,695 | 4.63% |
| VCSH | $10,000 | $12,298 | 3.12% |
A $10,000 investment in BNDX would have resulted in a final balance of $13,695. This is a profit of $3,695 over 7 years and amounts to a compound annual growth rate (CAGR) of 4.63%.
With a $10,000 investment in VCSH, the end total would have been $12,298. This equates to a $2,298 profit over 7 years and a compound annual growth rate (CAGR) of 3.12%.
BNDX’s CAGR is 1.51 percentage points higher than that of VCSH and as a result, would have yielded $1,397 more on a $10,000 investment. Thus, BNDX outperformed VCSH by 1.51% annually.
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